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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Interactive Gam | LSE:IGH | London | Ordinary Share | GB0034347921 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:0098Z
Interactive Gaming Holdings PLC
26 June 2007
Press Release 26 June 2007
Interactive Gaming Holdings plc
("IGH" or "the Group")
Final Results
Interactive Gaming Holdings plc, the online sports betting and gaming Company,
today announces its Final Results and the posting to shareholders of its Annual
Report and Financial Statements for the year ended 30 November 2006.
Highlights
* Turnover for the year up to #32.9 million (2005: #8.1 million)
* Gross margins increased to 5.4% (2005: 3.1%)
* Gross Profit up to #1.8 million (2005: #0.25 million)
* Continuing cost reductions through synergies and streamlining of operations
taking effect from Q3 2006
* Launched PremierBet and Heathorns Casinos
* White label agreements signed with Betinio and Maharajah Sports
Commenting on the Results, Thomas Taule, Executive Chairman of Interactive
Gaming Holdings, said: "2006 has been a transformational year for IGH. With
turnover significantly increasing to #32.9 million, we are confident that the
Group now has the scale and expertise to reach profitability in the near future.
Much focus has been placed on the continued advancement to our technology
platform which went live in April 2006.
Based on recent clarification of the 2005 Gambling Act, the Board has taken the
decision to combine operations currently based in the UK with those based in
Malta. This will create synergies and therefore reduce operating costs. In
particular, combining operations in this manner will allow the Group to
significantly reduce headcount without having material impact on group turnover.
This cost reduction exercise is already underway and is expected to have a
positive impact from end of July onwards.
IGH has successfully built up a robust customer base for both of our Internet
gaming brands, Heathorns and PremierBet. Customers now also benefit from the
PremierBet Casino, launched in August 2006, and Heathorns Casino, launched in
November 2006."
The Annual Report and Financial Statements for the year ended 30 November 2006
have today been posted to shareholders and are available from the Company's
website www.igh.com.
For further information:
Interactive Gaming Holdings Plc
Thomas Taule, Executive Chairman Tel: +44 (0) 207 745 6273
tom@igh.com www.igh.com
Media enquiries for Interactive Gaming Holdings Plc:
Abchurch
Chris Lane / Franziska Bohnke Tel: +44 (0) 20 7398 7700
franziska.boehnke@abchurch-group.com www.abchurch-group.com
Executive Chairman's Statement
These results demonstrate IGH's strong progress during the financial year to 30
November 2006. The two strategic acquisitions made in 2005, Heathorns and
PremierBet, have been fully integrated into the Group and we have focused on
building on the relative strengths of these brands, namely horseracing for
Heathorns and football for PremierBet.
We have always stated our desire to maintain IGH's position as one of the most
technologically advanced gaming companies. To achieve this, both Heathorns and
PremierBet have been successfully moved on to the latest version of Orbis'
OpenBet computerised bet acceptance system. Careful planning ensured that the
transition was carried out with the minimum of disruption to customers of both
companies. The OpenBet system provides a fully integrated back-end for both
Heathorns and PremierBet and allows a wide range of methods by which to bet
either by Internet, telephone or mobile.
We have also strengthened our trading team to allow customers to benefit from
access to a far wider choice of sporting events on which to bet including US
Sports, Rugby League and Union, cricket, darts and snooker amongst many others.
All back office functions for Heathorns and PremierBet are managed from a
central location, optimising efficiencies across all betting channels. Costs of
the investment in OpenBet are in line with expectations and modifications have
been made during the year to improve efficiency and trading performance.
In July PremierBet casino went live using the new casino software provided by
Orbis. The Group focused on promoting the casino product to sportsbook
customers. The casino has proved popular and will be a fundamental driver behind
PremierBet's profitability in the future. Heathorns' casino went live in
November 2006 and is also benefiting from increased customer acquisition. In
addition, casionlondon.com was also launched in November 2006. This soon gained
resonance with customers and more similar "local" casinos are in the pipeline.
IGH's affiliate programme went live in September 2006 using the One World Gaming
brand. This approach has proved popular with affiliate sites and increasing
numbers of customers were generated using this approach.
During the year IGH signed white label agreements with operators Betinio and
Maharajah clubs which both went live after the year end.
The database of both companies was reappraised on an ongoing basis during the
year. Customer retention programmes were instigated with many customers being
re-rated.
Based on the recent clarification to the 2005 Gambling Act, the Board has taken
the decision to relocate its operations to Malta, a location with a more defined
regulatory environment. This is not expected to incur significant costs.
Financial Review
During the year turnover rose to #32.9 million (#27.3 million in H2) up from
#8.1 million the previous year or more relevant up from a combined total for the
two operating companies of #23.4 million the previous year. The Group margins
increased overall to 5.4% (5.6% in H2 2006) with Heathorns performing
exceptionally well returning 9.8% on #16.2 million turnover.
Operating expenses increased in the second half of 2006 as the Group built up
resources to cope with increasing turnover. With the re-rating of the customer
database to a more recreational customer base, the relocation of the UK
operations to Malta and the reduced betting duty costs, we expect to make
significant savings on operating costs for 2007.
We are confident that the combined effect of increased turnover and anticipated
costs savings will result in the Group reaching profitability in the near
future.
Fund raising / share issues
On 21 April 2006, the Group raised #563,562 from a placement of 9,392,699 new
ordinary shares at six pence per share. In addition, a loan of #65,659 from
Blue Lizard Commercial Limited was converted into 1,094,320 new ordinary shares
six pence per share.
On 21 September 2006, IGH raised approximately #300,000 through the issue of
6,000,000 new ordinary shares at five pence per share.
The monies raised from these placings have been put towards marketing programmes
to increase new customer acquisition numbers and to satisfy market demand for
stock.
On 24 May 2007, IGH arranged and met all conditions for a #600,000 credit
facility with General Capital Venture Finance Limited. IGH has drawn down the
full amounts available under this Facility. .
IGH intends to raise additional funding as appropriate for working capital
requirements and marketing post the transfer of operations to Malta.
Directorate Changes
Following the Group's AGM on 5 June 2006, Graham Doyle tendered his resignation
as a Non-Executive Director of IGH to concentrate on other business commitments.
Graham Doyle joined the Board as a Non-Executive Director in October 2005 and
was the Managing Director of PremierBet.
As previously announced, as a result of the decision to relocate IGH's
headquarters to Malta, John Heaton tendered his resignation as Chief Executive
on 25 May 2007. I have resumed the management of the day to day operations of
IGH, supported by a very strong operational management team.
Thomas Taule
Executive Chairman
25 June 2007
Interactive Gaming Holdings plc
Consolidated profit and loss account for the year ended 30 November 2006
Note 2006 2005
(restated)
# #
Turnover 1 32,944,258 8,090,232
Cost of Sales (31,175,867) (7,839,697)
_________ _________
Gross Profit 1,768,391 250,535
Administrative expenses:
Operating expenses (3,532,084) (1,032,397)
Share based payments (15,637) (1,470,009)
Amortisation of Goodwill (187,064) (82,453)
_________ _________
Administrative expenses (3,734,785) (2,584,859)
_________ _________
Operating Loss (1,966,394) (2,334,324)
Interest Receivable 16,811 4,163
Interest Payable and Similar Charges (19,361) (3,750)
_________ _________
Loss on ordinary activities before taxation 5 (1,968,944) (2,333,911)
Taxation 6 44,711 -
_________ _________
Loss on ordinary activities after taxation (1,924,233) (2,333,911)
Loss per share - basic and diluted 8 (3.83p) (5.85p)
2006 2005
# #
Note
Consolidated statement of total recognised
gains and losses
Loss for the financial year (1,924,233) (2,333,911)
Exchange translation differences 10,342 (6,028)
_______ _______
Total recognised gains and losses for the year (1,913,891) (2,339,939)
__________ _______
Prior year adjustments 1 (1,470,009)
_______
Total gains and losses recognised since last annual report (3,383,900)
_______
Interactive Gaming Holdings plc
Consolidated balance sheet at 30 November 2006
------------------------------------------------------------------------------------------------------------------------
Note 2006 2006 2005 2005
(restated) (restated)
# # # #
Fixed assets
Intangible Assets 10 1,744,622 1,931,686
Tangible assets 11 1,210,306 971,752
_______ _______
2,954,928 2,903,438
Current assets
Debtors 12 1,001,375 695,151
Cash at bank and in hand 219,916 1,145,248
_______ _______
1,221,291 1,840,399
Creditors: amounts falling due
within one year
Bank overdraft 9,109 -
Convertible Debt 13 370,143 370,143
Other 13 1,970,418 1,520,331
_______ _______
2,349,670 1,890,474
_______ _______
Net current liabilities (1,128,379) (50,075)
_______ _______
Total assets less current liabilities 1,826,549 2,853,363
Creditors: amounts falling due
after one year 14 (254,194) (291,886)
_______ _______
Net assets 1,572,355 2,561,477
_______ _______
Capital and reserves
Called up share capital 16 859,308 694,438
Share premium account 18 3,105,551 2,361,289
Merger Reserve 18 604,444 604,444
Share based payments reserve 18 1,802,507 1,786,870
Other Reserve 18 29,138 29,138
Profit and loss account 18 (4,958,450) (3,044,559)
Equity component of financial instruments 129,857 129,857
_______ _______
Total shareholders' funds 19 1,572,355 2,561,477
_______ _______
The financial statements were approved by the Board on 25 June 2007
T J Taule
Director
Interactive Gaming Holdings plc
Company balance sheet at 30 November 2006
------------------------------------------------------------------------------------------------------------------------
Note 2006 2006 2005 2005
(restated) (restated)
# # # #
Fixed assets
Investments 9 2,295,193 2,291,193
Tangible Assets 11 76,729 2,288
_______ _______
2,371,922 2,293,481
Current assets
Debtors 12 933,713 540,515
Cash at Bank and in Hand 10,082 593,257
_______ _______
943,795 1,133,772
Creditors: amounts falling due
within one year
Convertible Debt 13 370,143 370,143
Other 13 351,441 294,449
_______ _______
721,584 664,592
_______ _______
Net current assets 222,211 469,180
_______ _______
Net assets 2,594,133 2,762,661
_______ _______
Capital and reserves
Called up share capital 16 859,308 694,438
Share premium 18 3,105,551 2,361,289
Merger Reserve 18 604,444 604,444
Share based payments reserve 18 1,802,507 1,786,870
Other Reserve 18 29,138 29,138
Profit and loss account 18 (3,936,672) (2,843,375)
Equity component of financial instrument 129,857 129,857
_______ _______
Total shareholders' funds 19 2,594,133 2,762,661
The financial statements were approved by the Board on 25 June 2007
T J Taule
Director
Interactive Gaming Holdings plc
Consolidated cash flow statement for the year ended 30 November 2006
Note 2006 2005
(restated)
# # # #
Net cash outflow from operating 21 (1,418,807) (1,177,780)
activities
Return on investments and servicing of
finance
Interest Received 16,811 4,163
Interest Paid (19,361) (3,750)
_______ _______
(2,550) 413
Taxation 44,711 -
Capital expenditure
Payments to acquire tangible assets (472,704) (464,312)
Disposal of fixed assets 5,775 -
_______ _______
(466,929) (464,312)
Acquisitions and Disposals
Payments to acquire subsidiary - (615,642)
undertakings
Cash acquired - 938,970
_______ _______
- 323,328
_______ _______
Cash outflow before financing activities (1,843,575) (1,318,351)
Financing
Issue of ordinary share capital 929,223 2,418,000
Share issue costs (20,089) (130,200)
_______ _______
909,134 2,287,800
_______ _______
(Decrease) / Increase in cash in the year 22 (934,441) 969,449
_______ _______
Interactive Gaming Holdings plc
Notes forming part of the financial statements for the year ended 30 November 2006
1 Accounting policies
The financial statements have been prepared under the historical cost convention
and are in accordance with applicable accounting standards. The following
principal accounting policies have been applied:
Basis of preparation
The financial statements have been prepared on the going concern basis which
assumes that the company will continue in operational existence for at least 12
months from the date of signature of these accounts.
The directors have prepared detailed forecasts for the next 2 years which
indicates that the group will be cash flow positive following cost reductions
that are currently being implemented through the consolidation of group
operations to the Maltese office. In addition to these cost savings, the
directors recognise the need for additional capital to implement these changes
and are in advance discussions with a number of parties. One such source of
additional capital is a conditional placing agreement to raise a minimum of
#250,000 up to a maximum of #1,000,000 at the Group's discretion. This facility
is subject only to the lifting of the suspension of the Company's shares on AIM
and the Group has agreed to proceed with an initial placing of #250,000 shortly
after resumption of trading. The Group is also in advanced discussions with the
debenture holder to increase facilities by a minimum of #250,000. These cash
inflows, or similar financing, are required in order for the Group to remain a
going concern.
On the basis that the Group receive #250,000 as expected from a placing shortly
after trading resumes, together with increased facilities from the debenture
holder combined with Group's option to potentially raise an additional #750,000
under the same placing agreement, the directors consider that the Group will
have sufficient funds to enable it to operate for at least 12 months from the
date of signature of these accounts. However, any such forecasts are uncertain.
In the event that the Group were unable to generate the required cash inflows
set out in the projections, the directors would seek alternative sources of
funding.
The financial statements do not include any adjustments that would result if the
group were unable to meet its forecast growth targets or raise additional funds.
Prior year adjustments
The prior year figures have been restated to reflect the following changes:
* Financial Reporting Standard 20 "Share based payments" (FRS20): In order
to comply with the provisions of FRS20, the directors have calculated the fair
value of all share options, as set out within note 17. In previous years no
valuation was required. This has resulted in the prior year loss increasing by
#1,470,009.
* Financial Reporting Standard 25 "Financial instruments: presentation"
(FRS25): In order to comply with FRS 25, the directors have separately disclosed
the debt and equity elements of the Group's compound financial instruments. This
has resulted in the net assets of the Group at 30 November 2005 increasing by
#129,857.
Basis of consolidation
The consolidated financial statements incorporate the results of Interactive
Gaming Holdings plc and of its subsidiary undertakings as at 30 November 2006
using the acquisition method of accounting.
The results of subsidiary undertakings are included from the date of
acquisition. Where subsidiaries have year ends that are different to that of the
holding company, accounts are drawn up to 30 November for consolidation into the
Group's financial statements.
Interactive Gaming Holdings plc
Notes forming part of the financial statements for the year ended 30 November
2006 (continued)
1 Accounting policies (continued)
Turnover
Turnover represents amounts receivable from betting and gaming activities,
including duties.
For Sportsbook betting, revenue represents stakes placed by clients in relation
to betting events which occur within the financial period. Where stakes are
placed on events occurring outside the relevant financial period, these stakes
placed by clients are held as a liability in the balance at cost until the
sporting event takes place and they are subsequently recognised as revenue.
For Casino and Games customers, revenue represents the "net-win" which is the
difference between the stakes placed and client winnings on games played in the
relevant financial period
Depreciation
Depreciation is provided to write off the cost, less estimated residual values,
of all tangible fixed assets, except land held as betting pitches and assets
under the course of construction, evenly over their expected useful lives. It
is calculated at the following rates:
Computer Equipment - 25-33% per annum straight line
Computer Software - 25-33% per annum straight line
Domains and Websites - 10% per annum straight line
Fixtures and Fittings - 10% per annum straight line
Goodwill
Goodwill arising on an acquisition of a subsidiary undertaking is the difference
between the fair value of the consideration paid and the fair value of the
assets and liabilities acquired. It is capitalised and amortised through the
profit and loss account over the directors' estimate of its useful economic life
of 10 years. Impairment tests on the carrying value of goodwill are undertaken:
* at the end of the first full financial year following acquisition;
* in other periods if events or changes in circumstances indicate that
the carrying value may not be recoverable.
Valuation of investments
Investments held as fixed assets are stated at cost less any provision for
impairment in value.
Financial instruments
Short term debtors and creditors are not treated as financial assets or
financial liabilities for disclosure purposes as defined by FRS 13 Derivatives
and other financial instruments.
The group does not hold or issue derivative financial instruments
for trading purposes.
Share options
The Company has performed fair value calculations in accordance with FRS 20 in
relation to share based payments which have been granted and a charge has been
made to the Profit and Loss account to recognise the costs of these grants.
Interactive Gaming Holdings plc
Notes forming part of the financial statements for the year ended 30 November
2006 (Continued)
1 Accounting policies (continued)
Foreign Currency
Foreign currency transactions of individual companies are translated at the
rates ruling when they occurred. Foreign currency monetary assets and
liabilities are translated at the rate of exchange ruling at the balance sheet
date. Any differences are taken to the profit and loss account.
The results of overseas operations are translated at the average rates of
exchange during the year and the balance sheet translated into sterling at the
rate of exchange ruling on the balance sheet date. Exchange differences which
arise from translation of the opening net assets and results of foreign
subsidiary undertakings are taken to reserves.
Pension costs
Contributions to the personal pensions of certain employees are charged to the
profit and loss account in the year in which they become payable.
Deferred taxation
Deferred tax is provided for on a full provision basis on all timing
differences, which have arisen but not reversed at the balance sheet date. No
timing differences are recognised in respect of gains on sale of assets where
those assets have been rolled over into replacement assets.
Deferred tax assets are recognised to the extent that that they are recoverable,
that is on the basis of all available evidence, it is more likely than not that
there will be suitable taxable profits from which future reversal of the
underlying timing differences can be deducted.
Any assets and liabilities recognised have not been discounted.
2 Turnover and segmental analysis
The turnover and loss on ordinary activities before taxation of the Group,
earned on the Group's one class of business, are attributable to its principal
activity.
Geographical analysis is as follows:
Turnover by destination Operating loss Net assets
2006 2005 2006 2005 2006 2005
# # # # # #
UK 27,823,604 7,160,440 (1,693,106) (2,171,660) 1,908,857 3,354,568
Europe 649,976 258,260 (76,699) (9,952) 462,092 (88,899)
Rest of world 4,470,678 671,532 (196,589) (152,712) (428,451) (334,048)
_________ ________ _________ ________ _________ _______
Total 32,944,258 8,090,232 (1,966,394) (2,334,324) 1,942,498 2,931,621
__________ __________ __________ __________ _________ _______
Net assets exclude interest bearing financial assets and financial
liabilities.
Interactive Gaming Holdings plc
Notes forming part of the financial statements for the year ended 30 November
2006 (Continued)
3 Staff Costs
2006 2005
# #
Staff costs, including executive directors'
remuneration, were as follows:
Wages and Salaries 722,376 171,361
Social Security Costs 60,309 14,302
Pension Costs 5,000 12,120
_______ _______
787,685 197,783
______ ______
The average number of staff during the year (excluding directors) was 24 (2006-
8)
4 Directors' remuneration
16 June
Year ended 2003 to
30 November 30 November
2006 2005
# #
Directors' emoluments 267,745 123,075
_______ _______
There were no pension payments in respect of directors.
The remuneration of the highest paid director was #173,715 (2005: #84,300)
5 Loss on ordinary activities before taxation
2006 2005
# #
This has been arrived at after charging:
Auditors remuneration:
Audit services 39,000 35,960
Other services relating to taxation 7,000 9,261
Operating lease rentals - other 78,019 17,792
Depreciation of owned fixed assets 201,024 81,087
Amortisation of Goodwill 187,064 82,453
_______ _______
Interactive Gaming Holdings plc
Notes forming part of the financial statements for the year ended 30 November
2006 (Continued)
6 Taxation on loss from ordinary activities
2006 2005
# #
Current tax
UK corporation tax on loss of the year - -
Overseas tax credit 44,711 -
Deferred tax
Origination and reversal of timing
differences - -
_______ _______
Taxation on loss on ordinary activities 44,711 -
_______ _______
The tax credit of #44,711 relates to tax refundable on an intercompany dividend
paid between two of the Maltese companies.
The tax assessed for the year is different to the standard rate of corporation
tax in the UK. The differences are explained below:
2006 2005
(restated)
# #
Loss on ordinary activities before tax (1,968,944) (2,333,911)
_______ _______
Loss on ordinary activities at the
standard rate of corporation tax
in the UK of 30 % (2005 - 30%) (590,683) (700,173)
Effects of:
Expenses not deductible for tax purposes 73,324 82,069
Capital allowances for year in excess
of depreciation (5,855) (224)
Goodwill amortisation not deductible
for tax purposes 56,119 24,736
Unrelieved tax losses available for
future offset 467,095 593,592
_______ _______
Current tax charge for year - -
_______ _______
The group has unrelieved tax losses at the balance sheet date of approximately
#6,000,000 (2005 - #5,000,000). No deferred tax asset has been recognised in
respect of the taxable losses on the basis that it is not sufficiently certain
whether any future economic benefit will arise.
7 Loss for the financial year
The company has taken advantage of the exemption allowed under Section 230 of
the Companies Act 1985 and has not presented its own profit and loss account in
these financial statements. The group loss for the year includes a loss after
tax and before dividends of #1,093,297 (2005 restated: #2,249,546) which is
dealt with in the financial statements of the parent company.
Interactive Gaming Holdings plc
Notes forming part of the financial statements for the year ended 30 November
2006 (Continued)
8 Loss per share
The calculation of loss per share for the year ended 30 November 2006 is based
on the loss after taxation of #1,924,233. The calculation of basic loss per
share and diluted loss per share is based on a weighted average number of shares
in issue during the year of 85,930,796 (2005: 69,443,777). As the average market
price of the shares for the period was less than the exercise price of any
options and convertible debt outstanding during the period, the options are not
deemed to have a dilutive effect.
The diluted loss per share is the same as the basic loss per share.
9 Investments
Subsidiary
undertakings
Company #
As at 1 December 2005 2,291,193
Additions 4,000
_______
At 30 November 2006 2,295,193
_______
Details of the investments in which the Company directly or indirectly holds
more than 10% of the nominal value of any class of share capital are:
Proportion of
Country of ordinary share
Name incorporation capital held Nature of business
%
Heathorns (Malta) Limited Malta' 100 Holding company
Heathorns (International) Limited Malta 100 Bookmaker
A.Heathorn (Course) Limited UK 100 On course bookmaker
Heathorns (UK) Limited UK 100 Dormant
Interactive Entertainment British 100 e-gaming portals
Networks Limited Virgin Islands
iGlobal Lottery Holdings Limited Belize 100 e-gaming portals
Interactive Media Group Limited UK 100 Dormant
Interactive Gaming Media Limited UK 100 Dormant
Premier Bet Limited UK 100 Sports betting
IGH Online Casinos Limited Malta 99.9 Dormant
IGH Management Services Limited Malta 100 Service provider
IGH Management Services (Holding)
Limited Malta 100 Holding company
PremierBet Malta Limited Malta 99.9 Dormant
All these companies have been included in the consolidated financial statements.
Interactive Gaming Holdings plc
Notes forming part of the financial statements for the year ended 30 November
2006 (Continued)
10 Intangible fixed assets
Group
Goodwill
#
Cost
At 1 December 2005 and at 30 November 2006 2,014,139
_______
Amortisation
At 1 December 2005 82,453
Charge for the year 187,064
_______
At 30 November 2006 269,517
_______
Net book value
At 30 November 2006 1,744,622
_______
At 30 November 2005 1,931,686
_______
11 Tangible fixed assets
Group
Computer Computer Domain Betting Fixtures and Total
Equipment Software names Pitches Fittings
# # # # # #
Cost
At 1 December 2005 122,472 359,250 644,699 12,470 38,489 1,177,380
Additions 56,750 358,520 - 44,100 13,334 472,704
Disposals - - - (5,775) - (5,775)
Exchange Adjustments - - (37,692) - - (37,692)
_______ _______ _______ _______ _______ _______
At 30 November 2006 179,222 717,770 607,007 50,795 51,823 1,606,617
_______ _______ _______ _______ _______ _______
Depreciation
At 1 December 2005 38,918 9,173 145,347 - 12,190 205,628
Charge for the Year 33,703 100,149 62,561 - 4,611 201,024
Exchange Adjustments - - (10,341) - - (10,341)
_______ _______ _______ _______ _______ _______
At 30 November 2006 72,621 109,322 197,567 - 16,801 396,311
_______ _______ _______ _______ _______ _______
Net book value
At 30 November 2006 106,601 608,448 409,440 50,795 35,022 1,210,306
_______ _______ _______ _______ _______ _______
At 30 November 2005 83,554 350,077 499,352 12,470 26,299 971,752
_______ _______ _______ _______ _______ _______
Interactive Gaming Holdings plc
Notes forming part of the financial statements for the year ended 30 November
2006 (Continued)
11 Tangible fixed assets (continued)
Company
Computer Computer Fixtures and Total
Equipment Software Fittings
# # # #
Cost
At 1 December 2005 2,288 - - 2,288
Additions 27,425 48,916 3,205 79,546
_______ _______ _______ _______
At 30 November 2006 29,713 48,916 3,205 81,834
_______ _______ _______ _______
Depreciation
At 1 December 2005 - - - -
Charge for the Year 2,907 2,090 108 5,105
_______ _______ _______ _______
At 30 November 2006 2,907 2,090 108 5,105
_______ _______ _______ _______
Net book value
At 30 November 2006 26,806 46,826 3,097 76,729
_______ _______ _______ _______
At 30 November 2005 2,288 - - 2,288
_______ _______ _______ _______
12 Debtors
Group Group Company Company
2006 2005 2006 2005
# # # #
Amounts due within one year:
Trade Debtors 839,616 380,233 - -
Amount due from subsidiary
undertakings - - 858,823 251,815
Other debtors 88,472 288,468 33,218 284,700
Prepayments and Accrued
Income 73,287 26,450 41,672 4,000
_______ _______ _______ _______
1,001,375 695,1 933,713 540,515
_______ _______ _______ _______
Interactive Gaming Holdings plc
Notes forming part of the financial statements for the year ended 30 November
2006 (Continued)
13 Creditors: amounts falling due within one year
Group Group Company Company
(restated) (restated)
2006 2005 2006 2005
# # # #
Convertible Debt
Convertible loan stock
(unsecured) 370,143 370,143 370,143 370,143
_______ _______ _______ _______
The convertible loan stock is convertible at the option of the holder at any
point up to 24 August 2008, at a conversion rate of #0.15 per 1p ordinary share.
The right to conversion shall be deemed to have been exercised if the Company's
share price has been at or above 15p for 60 consecutive business days.
The loan stock is repayable on 24 August 2008, if not previously converted. The
loan stock carries a coupon of 3%.
Under FRS 25 the directors have separated the debt and equity elements of the
instruments and presented them separately in the balance sheet.
Group Group Company Company
2006 2005 2006 2005
# # # #
Other Creditors:
Trade creditors 1,278,303 795,270 194,570 92,699
Social Security and other
taxation 43,474 88,465 10,017 -
Accruals and deferred income 543,695 360,457 120,441 175,337
Other creditors 104,946 276,139 26,413 26,413
_______ _______ _______ _______
1,970,418 1,520,331 351,441 294,449
_______ _______ _______ _______
Other creditors in the company relate to unpaid share capital acquired on
incorporation of iGlobal Lottery Holdings Limited.
14 Creditors: amounts falling due after one year
Group Group Company Company
2006 2005 2006 2005
# # # #
Amount due to related company 254,194 291,886 - -
(see note 20) _______ _______ _______ _______
254,194 291,886 - -
______ _______ _______ _______
Interactive Gaming Holdings plc
Notes forming part of the financial statements for the year ended 30 November
2006 (Continued)
14 Creditors: amounts falling due within more than one year (continued)
Amounts due to Amounts due to
related party related party
Group Group Company Company
2006 2005 2006 2005
# # # #
Maturity of debt:
In more than one year
but not more than two years 254,194 291,886 - -
_______ _______ _______ _______
The amount due to related party represents a loan note due to Pegasus Holdings
LLC. This is to be repaid based on the earnings before interest, tax and
depreciation of iGlobal Lottery Holdings Ltd and based upon the company's
projections will not be repayable before 30 November 2007.
15 Financial instruments
Treasury policy
The Group treasury operates as a centralised service managing interest rate and
foreign exchange rate risk and financing. The board agrees and reviews policies
and financial instruments for risk management. The Group holds or issues
financial instruments to finance its operations. In addition, various financial
instruments such as trade creditors arise directly from the Group's operations
which are usually financed by a mixture of cash and long term loans.
Fair value of financial instruments
There are no material differences between the book value and fair values of the
group's financial assets and liabilities.
Interest rates and borrowings
The group does not have any borrowings on which interest is charged, save for
the convertible loan referred to in Note 13 and the bank overdraft.
Currency of cash balances
The group has bank account balances in a number of currencies. At the year end
the balances were as stated below:
2006 2005
Currency # Currency #
Pounds sterling 61,694 61,694 1,142,087 1,142,087
US Dollar (1,604) (816) 5,415 3,161
Singapore dollar 310 102 - -
Hong Kong dollar 1,617,283 105,703 - -
Euro 3,622 2,441 - -
Maltese lira 9,432 14,871 - -
Interactive Gaming Holdings plc
Notes forming part of the financial statements for the year ended 30 November
2006 (Continued)
16 Share capital
Group Group Company Company
2006 2005 2006 2005
Number Number Number Number
Authorised
Ordinary shares of 1p each 400,000,000 400,000,000 400,000,000 400,000,000
__________ __________ __________ __________
#4,000,000 #4,000,000 #4,000,000 #4,000,000
__________ __________ __________ __________
Allotted, called up and fully paid
Ordinary shares of 1p each 85,930,796 69,443,777 85,930,796 69,443,777
__________ __________ __________ __________
#859,308 #694,438 #859,308 #694,438
__________ __________ __________ __________
Movements in issued share capital:
On 21 April 2006 9,392,699 ordinary shares of 1p were issued at a premium of 5p
per share.
On 21 April 2006, a loan of #65,659 was converted into 1,094,320 new ordinary
shares at a premium of 5p per share.
On 21 September 2006 6,000,000 ordinary shares of 1p each were issued at a
premium of 4p per share.
17 Share-based payments
At 30 November 2006 the following share options were outstanding in respect of
the ordinary shares and were capable of exercise up until the relevant date of
lapse:
Option tranche Date of grant Number of options Expiry Exercise price
1 24 October 03 100,000 24 October 08 5p
2 28 January 04 150,000 28 January 09 5p
3 04 August 04 2,500,000 04 August 09 5p
4 04 August 04 2,500,000 04 August 09 10p
5 04 August 04 2,500,000 04 August 09 15p
6 04 August 04 2,500,000 04 August 09 20p
7 29 April 05 25,000 29 April 10 7p
8 31 August 05 5,398,770 31 August 10 18p
9 09 September 05 35,000,000 09 September 10 6p
10 13 April 06 75,000 13 April 11 6p
11 17 July 06 3,500,000 17 July 11 5.25p
__________
54,248,770
__________
Interactive Gaming Holdings plc
Notes forming part of the financial statements for the year ended 30 November
2006 (Continued)
17 Share-based payments (continued)
The options granted on 17 July 2006 vest over a 3 year period and the number of
options vested at year end was 431,507.
In compliance with FRS 20 - 'Share based payments', the Group has attributed a
fair value to the issue of the above options and has used the Black-Scholes
calculation method for tranches 1,2 and 8 to 11, and Monte Carlo calculation
methods for tranches 3 to 7 to calculate this fair value. The fair value of
these options is being charged to the profit and loss account over the vesting
period, where applicable.
Details of the share options outstanding during the year ending 30 November 2006
are as follows:
No of Weighted Avg
Share options Exercise Price
Outstanding at 1 December 2005 50,673,770 0.086 pence
Granted during the year 3,575,000 0.053 pence
_______
Outstanding at 30 November 2006 54,248,770 0.083 pence
_______
Exercisable at 30 November 2006 51,180,277 0.085 pence
_______
The fair value of the options granted as at 30 November 2006 is #1,894,763.
The inputs into the valuation models are as follows:
2006 2005
Weighted average share price - tranche 7 7.50 pence
- tranche 8 6.25 pence
- tranche 9 6.00 pence
- tranche 10 6.00 pence
- tranche 11 5.25 pence
Expected volatility - tranche 7 66.03%
- tranche 8 64.46%
- tranche 9 64.85%
- tranche 10 62.23%
- tranche 11 62.86%
Expected life 5 years 5 years
Risk free rate - tranche 7 4.44%
- tranche 8 4.06%
- tranche 9 4.08%
- tranche 10 4.50%
- tranche 11 4.66%
Expected dividend yield 0% 0%
Interactive Gaming Holdings plc
Notes forming part of the financial statements for the year ended 30 November
2006 (Continued)
17 Share based payments (continued)
Expected volatility was determined by calculating the historical volatility of a
comparable listed entity. The expected life used in the model has been adjusted,
based on management's best estimate, for the effects of non-transferability,
exercise restrictions and behavioural conditions.
18 Reserves
Group
Merger Other Share Share Based Profit and Total
Reserve Reserve Premium Payments Loss
# # # # # #
Cost
At 1 December 2005 604,444 29,138 2,361,289 1,786,870 (3,044,559) 1,737,182
Shares issued during year net - - 744,262 - - 744,262
of costs
Share based payments made - - - 15,637 - 15,637
during the year
Exchange adjustment - - - - 10,342 10,342
Loss for the year - - - - (1,924,233) (1,924,233)
_______ _______ _______ _______ _______ _______
At 30 November 2006 604,444 29,138 3,105,551 1,802,507 (4,958,450) 583,190
_______ _______ _______ _______ _______ _______
Company
Merger Other Share Share Based Profit and Total
Reserve Reserve Premium Payments Loss
# # # # # #
Cost
At 1 December 2005 604,444 29,138 2,361,289 1,786,870 (2,843,375) 1,938,366
Shares issued during year - - 744,262 - - 744,262
net of costs
Share based payments made - - - 15,637 - 15,637
during the year
Loss for the year - - - - (1,093,297) (1,093,297)
_______ _______ _______ _______ _______ _______
At 30 November 2006 604,444 29,138 3,105,551 1,802,507 (3,936,672) 1,604,968
_______ _______ _______ _______ _______ _______
Interactive Gaming Holdings plc
Notes forming part of the financial statements for the year ended 30 November
2006 (Continued)
19 Reconciliation of movements in shareholders' funds
Reconciliation of movements in shareholders' funds
Group Group Company Company
2006 2005 2006 2005
(restated) (restated)
# # # #
Loss for the year (1,924,233) (2,333,911) (1,093,297) (2,249,546)
Exchange differences on foreign
currency net investments 10,342 (6,028) - -
Ordinary shares issued at par 164,870 463,028 164,870 463,028
Premium on ordinary shares issued 764,351 2,030,529 764,351 2,030,529
Expenses of shares issued (20,089) (130,200) (20,089) (130,200)
Merger Reserve arising - 604,444 - 604,444
Share based payments 15,637 1,470,009 15,637 1,470,009
Equity element of convertible loan note - (32,183) - (32,183)
Share options issued at fair value - 29,138 - 29,138
_______ _______ _______ _______
(Decrease) / Increase in shareholders funds (989,122) 2,094,826 (168,528) 2,185,219
Shareholders' funds at 1 December 2005 2,561,477 466,651 2,762,661 577,442
_______ _______ _______ _______
Shareholders' funds at 30 November 2006 1,572,355 2,561,477 2,594,133 2,762,661
20 Related party disclosures
During the year the group entered into the following transactions with Pegasus
International Holdings LLC, a company of which Thomas Taule is a director and
has an interest:
There is an unsecured loan note bearing no interest of #254,194 ($500,000) (2005
- #291,886, $500,000) issued by iGlobal Lottery Holdings Limited to Pegasus
International Holdings LLC on 8 September 2004, which at the year end remains a
group creditor, repayable after more than one year.
During the year consultancy fees of #90,000 (2005 - #90,950) were paid by the
group to Pegasus International Holdings LLC.
At 30 November 2006 Pegasus International Holdings LLC held 45,000,000 share
options, at a price ranging from 5p to 20p, in the company and 14,541,000 shares
in the company.
Interactive Gaming Holdings plc
Notes forming part of the financial statements for the year ended 30 November
2006 (Continued)
21 Reconciliation of operating loss to net cash outflow from operating
activities
2006 2005
# #
Operating loss (1,966,394) (2,334,324)
Amortisation 187,064 82,453
Depreciation 201,024 81,087
Increase in share based payments provision 15,637 1,470,009
Increase in debtors (306,225) (388,534)
Increase/(decrease) in creditors 450,087 (88,471)
_______ _______
Net cash outflow from operating activities (1,418,807) (1,177,780)
_______ _______
22 Analysis of net funds / debt
At Cash Exchange At
1 December 2005 Flow Differences 30 November
2006
restated # # #
#
Cash in hand and at bank 1,145,248 (934,441) - 210,807
Debt due within one year (370,143) - - (370,143)
Debt due after one year (291,886) - 37,692 (254,194)
_______ _______ _______ _______
Total net funds / (debt) 483,219 (934,441) 37,692 (413,530)
_______ _______ _______ _______
The cash in hand and at bank at 30 November 2006 is the net of the Group cash
balance of #219,916 (2005: #1,145,248) and the overdraft of #9,109 (2005: #nil).
Interactive Gaming Holdings plc
Notes forming part of the financial statements for the year ended 30 November
2006 (Continued)
23 Reconciliation of net cash flow to movement in net funds
2006 2005
# #
(Decrease) / Increase in cash in year (934,441) 969,449
Issue of loan note - (500,000)
Exchange differences 37,692 (27,755)
Change in equity element of convertible debt - (32,183)
_______ _______
Movement in net (debt) / funds in the year (896,749) 409,511
Net funds at 1 December 2005 483,219 73,708
_______ _______
Net (debt) / funds at 30 November 2006 (413,530) 483,219
_______ _______
24 Post balance sheet events
On 24 May 2007, IGH arranged and met all conditions for a #600,000 credit
facility with General Capital Venture Finance Limited. IGH has drawn down the
full amounts available under this Facility.
John Heaton tendered his resignation on 25 May 2007 as Chief Executive with immediate effect.
25 Operating lease commitments
Annual commitments under non-cancellable operating leases are as
follows:
2006 2006 2005 2005
# # # #
Land & buildings Other Land & buildings Other
Expiry between one & two years 19,275 29,285 20,859 92,276
Expiry between two & five years 32,901 5,425 39,039 10,758
Expiry after more than five years 56,670 15,359
_______ _________ _______ _________
Total 108,846 34,710 75,257 103,034
_______ _______ _______ _______
This information is provided by RNS
The company news service from the London Stock Exchange
END
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